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Ministry of Investment denies privatization report

Moheiddin: Companies to be offered for sale after individual preparation CAIRO: The Ministry of Investment (MOI) denied Monday news reports of its plans to privatize 100 fully and partially state-owned companies in 2007 including Eastern Tobacco, North Cairo Mills, Delta Fertilizers and Heliopolis Housing. “News published this morning of the Ministry’s intentions to privatize a …

“News published this morning of the Ministry’s intentions to privatize a number of public companies in 2007 bear no truth, a Minister’s Office statement said. “Minister Mahmoud Moheiddin has not spoken to any reporters regarding this matter. Privatization announcements are issued only after companies are prepared individually.

State-owned Al Ahram daily had published a story in its Jan. 22 issue on MOI’s plans to privatize 45 fully-owned state companies and 55 partially-owned ones. According to the report, MOI is preparing to sell the government’s 52 percent stake in Eastern Tobacco, the country’s lone tobacco producer. The list also included the government’s 25 percent stake in North Cairo Mills, 30 percent stake in Delta Fertilizers and 10 percent stake in Heliopolis Housing.

A Chemical Industries Holding Company spokesman told The Daily Star Egypt Eastern Tobacco is still undergoing a thorough restructuring process in preparation for privatization but no decision has been made yet by either company or ministry officials.

Despite recording a record LE 13.8 billion in privatization revenues in FY 2005-06 on 46 transactions, MOI has run into strong public criticism over its intentions to sell vital state-owned producers in the food, cement and energy sectors.

Plans to offer shares in Delta for Sugar, and the Flour Mills of North Cairo, Central Egypt and Alexandria were nixed after the monthly inflation rate hit double digits in October, carried mainly by the almost 40 percent weight of food items on the consumer price index. In December, the government reports inflation reached 12.4 percent, continuing its climb for the ninth consecutive month.

In the energy sector, MOI ran into difficulty in attracting interest to Misr for Aluminum and Alexandria Mineral Oils Company because of what analysts believed was the overpricing of the companies’ shares relative to their value on the Cairo and Alexandria Stock Exchange.

In late November, MOI issued a similar denial of published reports of its privatization plans. In addition to company restructuring, a senior MOI official said the ministry takes into consideration market and economic conditions before its decisions are made.